China's Outward FDI: A Study of Push and Pull Factors

This study is an attempt to identify Chinäs outward FDI. The factors have been separated into push and pull factors. The pull factors are studied through panel OLS, while the co-integration method and ECM are used to identify the push factors. Internalization Theory is the main conceptual framework. This result shows Asian exports of fundamental products and GDP per person employed are positively associated the OFDI. However, regulatory quality is negative. For the push factors, Chinäs foreign reserves, exchange rate, patents and wage are found to positively impact outward FDI. Nonetheless, Chinäs export and saving rate are negatively associated with Chinäs OFDI. Then the ECM shows that Chinäs exchange rate has negatively associated with Chinäs OFDI at 15% significance. When Chinese¿s policies supported its OFDI since 2000, its OFDI increased rapidly.